Is the proposed new Massachusetts cigarette tax fair?

As this piece is being written, the Massachusetts House passed a bill with a 93-52 vote to increase the cost of cigarettes by $1 per pack. According to the Boston Herald, the increase would generate $174 million in new taxes.

As of January 1, 2008, according to the Federation of Tax Administrators (taxadmin.org), Massachusetts currently ranks 15^th in nation on cigarette taxes, with a $1.51 of state taxes on cigarettes. The highest in the nation is New Jersey, which $257.50 in taxes. The lowest state in the Union is Missouri, which just charges 17¢ per pack. If the Massachusetts cigarette tax goes up $1, the $2.51 of taxes will be the second highest in the nation.

As for the bordering states, currently, the cigarette tax in Vermont is $1.70 per pack (11^th), $1.08 in New Hampshire (24^th), $2.46 in Rhode Island (2^nd) and $2.00 per pack in Connecticut (4^th). It is not known whether the expected revenue projections included the fact that we will lose many purchasers of tobacco products to New Hampshire where the cigarette tax will be $1.43 per pack lower, as well as purchasers from Connecticut or Rhode Island where there will no longer be a significant tax disparity. Merchants in western Massachusetts should be aware that New York has $1.50 in taxes on cigarettes, making the state cigarette tax $1.01 less per pack in places such Lebanon. Of course, on state Indian reservations in New York there are no cigarette taxes producing whopping savings for consumers.

There is little denying that cigarette smoking is just about the most harmful thing you can do to your body, save for taking up using crack cocaine for a hobby or jumping off a cliff without a parachute. The problem is that it is powerfully addictive, and those that smoke may be powerless to quit.

One justification for the tax is that cigarette smokers overly taxes the health care system. But most of the studies only consider cost imposed from dying of cigarette related diseases. Since everybody dies, it by no means is certain whether that the cost of dying by cancer is actually more expensive than the cost imposed by the type of death which would have occurred later in life but for the patient’s smoking. Moreover, there are costs associated with living—there are routine health care costs, dental cost, and cost for things such as broken hips. There are also the costs associated with providing housing for an elderly person who has not died, as well as exorbitant nursing home costs that often must be picked up by the state. Finally, when people die early, there is the savings on Social Security and Medicare. Obviously, I am not advocating not imposing a cigarette tax so that people would die off early and we would save money, in fact that would be demented, but I only point out that the argument that there is somehow a net savings when people live longer and die of non-cigarette related reasons may be specious.

The more credible argument for increasing the cost of cigarettes is that it may reduce the number of smokers. One problem with this argument is that it does not account for the number of people that take up rolling their own cigarettes and who often do not use filters. Another is that monies that were promised to be spent on fighting smoking almost never end up being used as promised and the taxes just end up back in the general tax revenues, as has happened in Massachusetts before.

Still, there are some people that decide that they cannot afford to smoke anymore, and actually do cut back or quit altogether. But the question is how many? According to the Birmingham News, when Alabama raised its cigarette taxes in 2004 from 16.5 cents per pack to a still low of 42.5 cents, there was no reduction in the percentage of people that smoked. According to a 2001 study by researchers at the Johns Hopkins Bloomberg School of Public Health, “Laws limiting vending machine access had a statistically significant deterrent effect among youth who smoked, but cigarette taxes did not.” The problem is that when you start smoking, you do not yet have a one pack a day habit making the monetary deterrent minimal, and by the time you acquire such an addiction, you are so addicted you just pay the excess taxes to feed your habit.

One thing is for sure—the cigarette tax is the most regressive form of taxation out there, far worse than a flat rate tax. The $916 a year of Massachusetts state taxes for those who have a pack a day habit constitutes 3.66% of income if you make $25,000 per year, but just .916% of income if you make $100,000 per year. By way of comparison, the state income tax is currently a flat rate of 5.3%.

Rinaldo Del Gallo, III is a nationally published newspaper columnist.

This entry was posted on Thursday, July 3rd, 2008 at 11:38 am and is filed under Current Events, Vox Populi. You can follow any responses to this entry through the RSS 2.0 feed. | 603 views | Trackback | Print this page |

About Rinaldo Del Gallo Rinaldo Del Gallo, III, Esq. is the spokesperson of the Berkshire Fatherhood Coalition, whose website is BerkshireFatherhood.com. He has been practicing family law attorney and has been a member of the Massachusetts bar since 1996. Mr. Del Gallo has handled a wide variety of family law cases including issues of child custody, child visitation, child support, restraining orders, grandparent visitation, contempt of family court, access to academic records, guardianship, allegations of abuse, criminal allegations related to domestic violence, disputes over the care of a child, and care and protection proceedings before the Department of Social Services. For years, he has hosted bi-monthly free legal seminars for people of any gender having problems in family court. On behalf of non-custodial parents, he has had made numerous media appearances in printed news, radio, and television. He has authored numerous family law related articles and columns. He has performed extensive bro bono work for fathers. Attorney Del Gallo also has extensive experience as a civil rights attorney, working in the areas of free speech rights and ballot access. Mr. Del Gallo is also an intellectual property attorney and a patent lawyer, and has written what is regarded as one of the most famous law reviews in the area of patent law, “Are Methods of Doing Business Finally Out of Business As A Statutory Exception?,” that helped end the so-called “business method exception,” which paved the way for an entire field of software and Internet related patents. Attorney Del Gallo graduated from Northeastern University (Boston) with a Bachelor of Science degree in Electrical Engineering, and graduated from George Washington University (Washington) in the top of his three-year class. | More from Rinaldo Del Gallo, III